Coveri (Caveri?)

July 1, 2015

Enrico Coveri

On 3 May 2011, Enrico Coveri s.r.l. filed Israel trademark application 237,567 for ‘COVERI’ coveri(ng) clothing, footwear and headgear, all in class 25. The mark was eventually allowed and published for opposition purposes on 30 April 2012. On 23 July 2012, Sar-Go Investment LTD opposed the mark. The opposition related both to Israel TM 237,567 ‘COVERI’ and to Israel TM 237566 ‘ENRICO COVERI’ in Class 35, however, Sar-Go Investment LTD retracted their opposition to TM 237566 ‘ENRICO COVERI’ which was subsequently granted. In parallel with the Opposition before the Israel Patent Office, Enrico Coveri s.r.l. sued Sar-Go Investment LTD for infringing their (pending) mark. [– this is possible under common law rights, albeit not a good idea to sue before the mark issues].

Sar-Go Investment LTD asked the court to require that Enrico Coveri s.r.l. post a bond [which is common practice where a plaintiff is not domiciled in Israel] and, on failure by Enrico Coveri s.r.l. to do so, closed the case. On 31 December 2012, Sar-Go Investment LTD filed two trademarks, Israel TM 252378 “Coveri Kids” for wholesale of clothing and shoes for children and youth, for “COVERI HOME” for wholesale furniture and children’s domestic accessories both in class 35, but both applications were suspended at Opposer’s request until after the present Opposition is concluded.

Opposer’s Arguments

The Oposer claimed that they have used the (unregistered) marks Coveri Kids and Coveri Home for 15 years and had a reputation among their clients for these marks. The Opposer is a wholesaler whereas the Applicant is a manufacturer [this argument, together with the competing marks scenario created seems to be setting the scene for a request for co-existence]. In consequence of their longer usage in Israel, the Opposer claims that they should take precedence over Enrico Coveri s.r.l. in Israel under Section 24(a1)(2) of the Trademark Ordinance 1972, and, under sections 5(11) and 6(11) argued that allowing Enrico Coveri s.r.l.’s application to register would be unfair trade, would mislead the public and be contrary to the public good. In an alternative strategy, the Opposers argued that if Enrico Coveri s.r.l.’s was not canceled, then the two marks should be allowed to coexist due to the difference in sight and sound of the marks, as their desired mark was to be pronounced CAveri whereas the opposed mark was to be pronounced COveri. [I find this argument a little tenuous. The mark does not come with pronunciation instructions, and Israelis include Bedouin, Russian immigrants, American immigrants, Ethiopians, Thai foreign workers and Sudanese illegal immigrants. I doubt that there is a common pronunciation of vowels].

Applicant’s Counter Arguments

The Applicant claims a worldwide reputation in the word Coveri that goes back to the Seventies. [“When The Levee Breaks” — Led Zeppelin (1971) was a coveri song from the Seventies. It was originally recorded by Kansas Joe Mccoy and Memphis Minnie in 1929!]

The Applicant denied the allegations of misleading the public as they claimed to have the reputation and also argued that the Trademark Ordinance only protects registered marks, which the Opposer had not (then) registered.

Furthermore, the Applicant claimed that they were the first owner of the Coveri mark and back in 1986 had applied for ENRICO COVERI in claims 3 and 18, for soap and leather goods, and this the Opposer’s claims should be rejected. The Opposer was acting in bad faith as it was not conceivable that he was unaware of the Applicant who had marketed goods in Israel that were branded as COVERI.

Discussion

In the District Court proceedings, the current Applicant accused the Opposer of willful infringement and of ignoring requests from the Applicant to cease and desist from using the term Coveri. Furthermore, the Applicant argued that the Opposer’s us eof the term Coveri would lead to misleading the public as the Opposer’s goods were sold by the Applicant. The Applicant further claimed dilution of their mark and enrichment at their expense.

In their defense, the Opposer denied knowing about the Coveri brand when they chose their own branding. As wholesalers of clothing brands and not manufacturers, they were unaware of the Applicant’s brand. Furthermore, the Opposer denied infringing the Coveri mark as their marks was Coveri Kids and Coveri Home.

However, as noted abover, the District Court Proceedings were thrown out due to Applicant’s failure to post a bond.

The Applicant here, Enrico Coveri s.r.l., argued that the position taken by Sar-Go Investment LTD in the District Court estoppled them from claiming that the current proceeding be dismissed as the parties are the same in both proceedings. Support for this argument was given in Civil Appeal 246/66 Klausner vs. Shimoni.

The Trademark Office considered that the current situation was different as in the previous (court) proceeding, there was no substantive ruling as the case was thrown out, and the identities of the parties (and the marks in question) has switched, thus there is no estopple against bringing the case to trial. Furthermore, the legal arguments are different. For additional analysis, see TM 245411 Orez Gamalim Hahav Pninim (graphic logo) Yoram Sassa vs. Yehudit Matck, as published on the patent office website in April.

In conclusion, Deputy Commissioner MS Jaqueline Bracha saw no reason not to rule on the merits of the case.

Inequitable Behavior and the Common Good.

The Opposer claimed that the applications should be canceled as they were filed in bad faith, since the filing occurred 15 years after the opposer was using the mark and gaining a reputation in it. Furthermore, since the Court had thrown the case out, dealing with it on its merits now would be contrary to the public good under Section 11(5). The Applicant also accuses the Opposer of inequitable behavior since the choice of the term Coveri by the Opposer was itself an attempt to cash in on Henrico Coveri’s reputation. Arguments that Coveri means Cover Israeli Kids as the Opposer had claimed were dismissed as fanciful and unconvincing, and the alleged correct pronunciation as CAveri and not Coveri as written was further indication of inequitable behavior.

The Opposer considered the marks could not be registered under Sections 11(5) and 39(1a) of the Ordinance  due to inequitable behavior, but the Deputy Commissioner considered that this was not grounds for Opposition per se, only, for cancellation of an issued mark. Support for this argument was given in the Pioneer decision.

[I am less than happy with the Deputy Commissioner’s ruling that inequitable behavior can be grounds for cancellation of a mark once issued, but not for opposing the mark. I know it is considered a dirty word, but I am relatively formalistic in my approach to the Law and have little time for interpretation of what the law meant to say. However, I can see no logic in allowing grounds of inequitable behaviour to be sufficient to have an issued mark canceled, but not sufficient grounds to have a pending mark opposed. This seems senseless. I note that I disagreed with Ms Bracha in the Pioneer case as well  so at least I am consistent. Perhaps consistently wrong, but consistent.]

According to Ms Bracha, Section 11(5) was to cover cases such as to prevent an opponent to prevent an applicants from using opponents copyright protected artwork as trademarks.

Misleading the Public and Unfair Competition

As far as misleading the public is concerned, Ms Bracha considers that the mark has to be at least widely known if not formally ” a well known mark”. She goes on to apply the triple test to examine the similarities between the marks. As far as the sound of the mark is concerned, Ms Bracha noted that the Opposer claims that Coveri Kids has a patah sound (“a” as in cow – i.e. Cah-ver), whereas in on Henrico Coveri’s Coveri, the Sound is a holum “Oh” as in Copper. Noting that they are written the same way, Ms Bracha considers it unlikely that one can ensure that the marks are correctly pronounced and doesn’t think that anyone other than the Opposer’s who would be aware of the difference. [here I disagree. The word Coveri has a Kamatz Qatan and is pronounced Oh as in Copper by Yemenites and Ashkenazim but as Ah by Spanish and Portuguese and in the Standardized Hebrew pronunciation. Nevertheless, the word, written in English letterings, could certainly be pronounced either way. This reminds me of the road sign conveniently placed near Heathrow Airport to confuse tourists. It points to Slough. Is the ough an oo as as in through? Is it an uf as in rough, an ‘or’ as in bought? No, it’s an ow as in bough!]

In the Coveri mark and in Coveri Kids and Coveri Home, the dominant word is Coveri. Furthermore, the other words are descriptive and lacking in independent distinctive character. Consequently, the marks are visually and audibly very similar. Both Opposer and Applicant sell clothing and children’s goods, one wholesale and the other retail. The client base is thus different, but it still overlaps and one could imagine a purchaser of Coveri clothing could go into a COveri Home shop to buy furniture or accessories. Whilst, it is certainly possible that Henrico Coveri is using his name for branding purposes and Coveri Kids means Cover Israeli Kids so there is no intent to confuse, however, it is unlikely that the public would be aware of this. The Opposer has stores in the upscale Kikar Hamedina of Tel Aviv. The Applicant’s witness was more circumspect as to where they were using their trademark.

Reputation

Reputation in a specific market sector is judged by the time period the brand has been in use and the amount of publicity and marketing invested in linking the product to the brand name.

Coveri kids have shown 15 years history of the mark. However, Mina Tzemach’s market research has shown low brand penetration, nevertheless, Ms Bracha agreed with the Applicant that the onus is on the Opposer to show that they have a reputation in the mark and not that the Applicant does not.  Ms Tzemach’s affidavit was an appendix to another one and not a freestanding document. However, the The Opposer did not choose to cross-examine her on her findings which rather strengthens them.

Coveri admitted that they had never opened a shop, but claimed that their neckties and other things were sold in boutique stalls. Consequently, it appears that Coveri Kids and Coveri Home have a larger footprint in the market.

Equitable Behavior

It seems that Enrico Coveri acted after discovering that Coveri Home and Coveri Kids were strong marks in Israel. They first sent cease & desist letters and only subsequently filed their own marks, and later still , filed in the District Court. Under cross-examination from Adv. Tony Greenman, Enrico Coveri’s witness spoke about design shows abroad abut did not answer questions about their local advertising. Despite prompting by both Adv. Tony Greenman and by the Deputy Commissioner, the witness failed to show that the mark had been used in Israel prior 2011 and had local reputation. This lead her to suspect that the Applicant’s registration was merely to prevent being sued by the Opposer and was not indicative of actual use or intent to use.

Although in Israel one can apply for a mark not in use if there is intent to use, however the intent should be genuine. The Israel courts view defensive trademark practices with a jaundiced eye.

Such an approach is true in the US:

A lack of bona fide intent to use is a ground for an inter partes opposition proceeding to an application before the Trademark Board. Aktieselskabet, 525 F.3d at 21; McCarthy § 20:21, at 20-65,66. Lack of bona fide intent to support an intent-to-use application also may render an application void ab initio upon challenge in federal district court.” (W. Brand Bobosky v. Adidas AG, 843 F. Supp. 2d 1134, 1140 (D. Or. 2011).

The long and real usage by the Opposer and lack of cooperation by the Applicant’s witness lead Ms Bracha to consider that the mark should be refused under Section (6)11 of the Trademark Ordinance.

Previous Rights to the Mark

The Opposer claims prior rights to the mark under Section 24(ia)(2) of the Regulation. As far as distinctive marks is concerned, this is a relevant issue.

As cited in ITT. vs. Ratfone Import LTD, 23 June 2009:

“Furthermore, it is important to note that when a mark is canceled from the register or even if it was never registered, this does not indicate a lack of proprietary rights of the owner. There is a right of reputation which is protected as unregistered marks.

In this instance, however, the Opposer did not register their mark. They did not act to have the mark registered, and the present instance and the previous Court case were superfluous. Having ruled that the Opposition should be accepted under Section 11(6) the ownership of the marks is superfluous, particularly as the Opposer has long established usage and the Applicant has not shown usage in Israel. However, the lack of registration by the Opposer should be taken into account when ruling costs.

Conclusion

The mark is refused without a ruling of costs to the Opposer. The Opposer’s marks (Coveri Kids and Koveri Home) can continue to examination following this ruling.

Israel TM 237567 “Coveri” to Enrico Coveri, Trademark Opposition by Sar-Go Investment LTD, Ruling by Deputy Commissioner, Ms Jaqueline Bracha, 27 May 2015

COMMENT

Potahto or Poteitoe?

Gefen or Gafen?

Pronunciation aside, this case bears more than a passing resemblance to the Versace case, since we have a well know international design house and a couple of Israeli stores using the name in ambivalent faith. I therefore suspect we haven’t heard the last of this.

 

 


Novartis – Double Patenting in Israel

July 1, 2015

novartis

The present ruling relates to the issue of identical of overlapping patents and patent applications, and examines the ramifications of double patenting in Israel.

IL 2039732 is a Divisional Application of IL 176831 titled “Compressed Pharmaceutical Tablets or Direct Compression Pharmaceutical Tablets Comprising DRR-IV Inhibitor Containing Particles and Processes for their Preparation”.  During prosecution it received a final rejection and the Applicant, Novartis, has appealed this final Examiner’s rejection.

The Examiner considered that the claims of the parent and the divisional application are directed to the same invention. After this issue was first raised, the Applicant amended the claims, but the Examiner considered that the amended claim set (claims 1-23) covered the same invention as claims 23-26 of the parent application. Based on 5293/93 Welcome Foundation vs. Patent Commissioner (1993), the Examiner rejected the claims of the divisional application. A telephone conversation was to no avail. The Examiner issued a final rejection noting that there were substantive issues not addressed, whilst Applicant is appealing this decision claiming that the issue is one of interpretation of the law and has thus appealed to the commissioner.

The Commissioner held a hearing and allowed the Applicant to present a short summary of the comparative law in US, Europe, Australia, Japan, China and India. In this instance, the Examiner did not claim that the divisional had identical claims to the parent application, but that there was some overlap. According to the Commissioner, the issue is one of interpretation of Sections 2, 8 and 9 of the law. These state that an inventor is entitled to a patent, that a patent can only cover one invention and that where two or more applicants file for the same invention, the first to file is awarded the patent. The purpose of divisional applications is to prosecute additional inventions claimed within the same parent application.

In the Welcome case, claims 1-10 related to uses of a pharmaceutical preparation in the treatment of various diseases and claim 15 related to a method of preparation of the active ingredient.  Then Commissioner, the late Michael Ophir ruled a claim for use in preparing a medicament’ and ‘use in the treatment of’ were identical. He did not see that the application related to more than one invention. On appeal, Judge Winograd ruled that one can have one application for a material, a second one for the method of fabrication and a third one for uses, provided each application is directed to patentable subject matter and there is no overlap between the cases. There Judge Winograd went on to rule that one application cannot include more than one patentable invention, i.e. one should not award more than one patent for one invention, and this is a corollary of Section 8 that a patent should cover one invention. One can file a plurality of applications for a plurality of related patents provided that each one is directed to a patentable invention and the claims are not identical or overlapping.

In the present case, both the parent IL 176831 and the divisional application IL 203972 have the same title. In IL 203972 there is one independent claim. Claims 23 and 24 of the parent IL 176831 each depend on claim 1, and claims 25 and 26 are dependent on claims 24 and 23 respectively.

The independent claim of IL 203972 is directed to using a powder to form a pill for treating a wide range of ailments. Claims 23 – 26 of the parent IL 176831 are directed to forming tablets and a corresponding process. The divisional relates to various states that are not in the parent application, but both applications have the same specification. According to the Applicant, the parameters are identical but the parent claims the process whereas the divisional application claims use of the active ingredient to prepare a pharmaceutical.

According to the Examiner, the divisional application claims use of a formulation for treating a disease, where the formulation is given in claims 23-26 and the diseases treated are listed in claims 1-22. In both cases, the formulation is the same, the particle size is the same and the active ingredients and additives are the same as those given in claims 23-26 of the parent.

Novatis found the Wellcome decision poorly claimed and poorly reasoned and could not see why two applications could not claim identical or overlapping inventions. They argued that where applicants are the same, there is no need to relate to identical or significantly overlapping claims, holding that the Israel Patent Law does not prevent multiple patenting. Novartis argued that Section 2 is merely a declarative statement that the applicant may file a patent. It does not have legal ramifications, and certainly does not limit the number of patents that the applicant may file. Section 2 does include the word “one” and it should not be read into the claim such that one patent may be requested for one invention. Support for this interpretation is found by contrast to Section 9 which relates to different applicants with patent applications for the same invention.

The parties are in agreement that different applicants cannot be awarded separate patents for the same invention. Novartis holds that the same applicant can be awarded two or more patents for the same invention. The Examiner disagrees. Novartis accepts that there is no economical justification or logic in an applicant having more than one patent, and even sees this behavior as unacceptable. However, so long as there is some difference between the two patents, it is legitimate to award the protection of both patents.

The Commissioner upheld the Examiner’s conclusion and ruled that so long as there is nothing in claim 1 of the divisional that exceeds the scope of the claims of the parent, there is no reason to allow the divisional.

COMMENTS

In the US, the issue of double patenting is dealt with by filing a terminal disclaimer. Although this procedure prevents extending a term of protection (sometimes called ever-greening), it still has negative ramifications. Third-parties such as an alleged infringer may have to show that he is not infringing a number of overlapping patents. Likewise, a competitor may have to show a number of similar patents are invalid or not infringed. This places an unnecessary burden on third parties.

I think that although Novartis is correct that the Law does not explicitly prohibit multiple patents for the same invention, the Commissioner is correct that not to allow it is a reasonable interpretation of the intention and spirit of the law. Because of the large sums of money involved with pharmaceutical patents, this decision may well end up being appealed to the courts. If that happens, we will see how the Israel courts consider double patenting.


Connectivity, Buck Passing and those Damn Marks

June 21, 2015

dont-pass-the-buck-300x214

We have connectivity issues getting into the Israel Patent Office Secure Trademark Database. Where does one start?

Well there are some very nice people in the trademark department who after making other inane suggestions pass the buck to the Govt. Internet Access Helpline.

The Govt. Internet Access Helpline wants to know why do we want access to a govt. website? Are we government employees? Are we subcontractors working on a program?

After explaining the concept of professional legal representation opposite the patent office, the Helper-on-line asked if we can access the services without the smart-card. We explain that this is a new website and this is the only way to do things now. Paper filings are no longer acceptable. Logging in with an email and password is good for filing new applications, but for oppositions, etc. we need internet access using the smart-card.

Q. “Is the website up and running?”

Q. “I provide Internet support for government websites and I can’t get in either.”

A. Well, it’s supposed to be up and running. The nice people in the trademark department think its up and running.

Q. “The problem is your smart card. You have a lawyer’s smart card. Contact Comsign.”

So I contacted Comsign. Turns out that the card is NOT a lawyer’s card. It is a card issued by the Israel Patent Office for accessing the website and for filing documents with the Israel Patent Office. Does the card work? Well it did until the new site went up. Have you registered for the new site? Well we haven’t been asked to. We’ve been talking to people in the trademark office. If they thought we needed to register, they would presumably have registered us, no?

So the buck was passed from trademark office to computer support to connect card connector, to administrator and round and round we go!

Caucus Race

With apologies to Ezekiel, to James Weldon Johnson (1871–1938) and possibly to his brother, J Rosomond Johnson, to be sung to the tune of Dem Bones:

dem bones

Damn Marks!  

Reshut Patentim Connected the Damn Trademarks
Reshut Patentim in Department of Trademarks
Reshut Patentim  Connected Damn Trademarks
Now Hear the Commissioner’s Circular! 

Smart card connected to card reader
Card Reader connected to USB port
USB port recognized by Mother#$%^&
Computer’s connected to the WiFi
The WiFi’s connected to the server
The Servers’ connected to the Internet
Internet’s Connected to Patent Office Portal
Patent Office Portal is connected to Trademarks-on-line
Trademarks on line is connected to the database
Now Hear the Commissioner’s Circular!

Damn Marks, Damn Marks Gonna Walk Around
Damn Marks, Damn Marks Gonna Rise Again
Damn Marks Damn Marks Gonna be Paperless
Now Hear the Commissioner’s Circular! 

Damn Marks, Damn Marks, Damn Trademarks
Damn Marks Damn Marks Damn Trademarks
Damn Marks Damn Marks Damn Trademarks
Now Hear the Commissioner’s Circular! 


IP Best Practices Conference 2015

June 16, 2015

Kim's event

Intellectual Property Resources (IPR) held their annual conference entitled IP Best Practices 2015 in the Tel Aviv Sheraton Hotel on May 11, 2015. I apologize to the organizers and to readers for my tardiness in reporting this. The program can be found here.

This event has become an annual fixture in the Israel IP calendar, and is widely attended by in house counsel, foreign patent attorneys. The speaker list, as always, was impressive. The event was well attended by in-house IP counsel and by sole practitioners. There were also a number of participants who had flown in from abroad, not all of whom were sponsors or speakers.

Ruud Peters, strategic advisor to Philips gave his perspective on IP developments as did Toshimoto Mitono, a Senior IP Counsel at Sony. Whereas the issues and budgetary considerations that Philips and Sony have may not be relevant for most Israel companies and their IP counsel, whether in-house of a service provider, I did find some aspects of the talks relevant, and found the presentations as a whole, thought provoking and well worth attending. It was interesting hearing from Philips dismiss the company as a developer of shaving solutions that does strategic deals with manufacturers of other products, allowing them to use the Philips name on their products, where Philips has only a marginal influence, mostly on the aesthetics. I have long felt this to be the case, but rather enjoyed hearing someone from Philips saying it.

The regional updates were generally good, however the Indian practitioner seemed to get stuck in excruciating details of the formalities requirements for Indian native inventors having to first file in India and only later go abroad. This was of little interest to the other participants, none of whom were Indian. The Peter Sellers Goodness Gracious Me intonation merely accented the irrelevance. Micaela Modiano attempted to convince us that with the right attorney (her?) one could obtain patents for software in Europe. The problem was that one apparently requires novel and inventive hardware elements, so the jury is still out.

Chixue Wei, Chairman of the Board of Linda Liu & Partners didn’t speak English, but this didn’t stop him from giving a presentation, with his very presentable young female assistant doing a simultaneous translation for him. It was rather like a prequel for the Eurovision song contest in that one didn’t actually need to understand what he was saying to follow the gist, with the slides being quite adequate. Frankly I wondered why he didn’t have her present and apologize for his poor English, but note that His Excellence had come in person and would deal with questions on a one-on-one basis. This would have left us assuming that he had some English but just wasn’t up to public speaking. He made a valiant effort to convince us that he could solve all enforcement problems and may indeed by true, but it wasn’t convincing. I have yet to hear a foreign practitioner presenting himself as not being able to provide a solution. However, I can’t see myself intentionally engaging a practitioner who doesn’t speak English and suspect that this is true of others as well.

Terry Rea the Former Acting and Deputy Director USPTO and Deputy Under secretary for Intellectual Property (which is apparently anything but a secretarial position) gave a very polished fireside chat on changes in the USPTO. She even managed to professionally field a naughty question I asked her about when the USPTO examiners would come to realize that there might be relevant art filed in other countries and not necessarily in English.

The US practitioners that presented were drawn from Mintz Levin, Finnegan and Greenbaum & Bernstein. All spoke well and competently. The most useful presentation was that of Michael Fink of Greenbaum & Bernstein who addressed the issue of writing contracts with indemnity clauses, to roll over responsibility for IP to suppliers of components. I found myself making a written note to engage him for this task where relevant.

food at Kim's event

The food, as would be expected from the Sheraton, was plentiful and delicious. Breakfast was filling. During the breaks the refreshments provided an opportunity to graze mingle. Lunch was superb.

kim one eyed

Kim Lindy was taking a back seat on the day, and though ever present, was not introducing speakers. Not exactly a shrinking violet, it turned out that she had damaged her eye. With the patch and the military precision with which the event ran, she was reminiscent of Moshe Dayan. I suspect, that rather than being a Model Major General, behind the scenes, she was more like a Piratical Maid of all Work.

In terms of the quality of the presentations, the opportunity for networking and the refreshments, the event was extraordinary value for money. The fees were less for in-house counsel than for service providers. This is a common strategy abroad, but less frequently practiced in Israel. In theory it ensures lots of big fish for the IP harpoonists service-providers. Of course, manufacturing and research entities would generally be paying the attendant’s fees and a couple of hundred Shekels more or less may make little difference. I can understand but disagree with the short-sightedness of both employees of service providing IP firms and their employers who did not attend in large numbers. There were a number of practitioners from smaller firms, but only two employees from larger IP firms (one from Colb and one from Ehrlich).  I find this worrying. I can understand IP firms not patronizing each other’s events. I can also understand firms seeing IP Factor as competition or not being happy with some blog article or other and avoiding my events, despite their high educational and social value. With over 1600 blog posts, I have criticized decisions and rulings in which all firms were a party at some time or another and so can understand my loyal readership not patronizing my events. The thing is that Kim is not an IP firm. She is a service provider to IP firms, hosting events and training programs and offering software solutions. Now it may be annoying to some that she offers a platform to US and other foreign firms to work directly with in-house counsel but as Thomas Friedman put it, the world has gotten flatter. In-House counsel generally started life in one of the patent service providers. They are aware of foreign firms and know the advantages and disadvantages of engaging them via local practices. By boycotting Kim’s event, the larger Israeli practices are giving the US firms a free playing field.

I don’t expect an Israeli patent attorney to be expert on writing contracts for licensing or subcontracting manufacturing in the US. I would expect a local attorney to work with someone licensed abroad. Kim’s event enables one to learn who specializes in what and to get a brief overview of these sorts of issues which anyway are continuously changing. I think that Israel Attorneys owe it to their clients to have a basic handle on these issues and so am a firm believer in attending IP events like this.


Can evidence submitted in an adversarial civil legal proceeding be kept confidential from the opposing party?

June 14, 2015

trade secretevidence

Israel Patent Number 132540 “System and Method for Direct Monetary Transfer Using Magnetic Cards” to Yehuda and Yigal Tsabari issued and then lapsed due to failure to pay the renewals.

Back on 24 July 2014 the Israel Patent Office agreed to the patent being reinstated. Generally, third parties who are utilizing the patented technology in good faith relying on the fact that the patent was abandoned are granted a non-transferable license that allows them to continue their business activities.  Nevertheless, the Israel Patent Office Decision to allow a patent to be reinstated is published for opposition purposes, giving third parties three months to oppose the lapsed patent being reinstated.

In the case of IL 132540, on 23 November 2014, Going Dutch LTD filed an opposition to the reinstatement. They claimed that the patent had not lapses unintentionally, but that Tsabari had knowingly abandoned the patent and that this was evident from the way Tsabari tried to enforce his patent.

Tsabari responded to these charges but requested that part of his response be kept confidential by the Patent Office and not made available to the opposer, claiming that the information constituted a Trade Secret. The documents to be kept secret included a document describing an enabling system, a draft contract with a credit card organization, a proposal for developing a system based on the patent, a contract with an investor and a letter from the investor, canceling the contract.

The patentee argued that these documents were confidential and for the parties themselves, and that their publication could compromise the patentee’s ability to compete in the relevant market. They were submitted as evidence that the invention had not been abandoned, but beyond that, their contents were not relevant to the issue in question, and so their contents should remain restricted.

The Opposer noted that the patentee had not provided sufficient evidence to prove that the documents in question were fairly described as trade secrets. This was particularly the case due to the fact that the documents apparently related to a failed business transaction from ten years previously. Furthermore, the patentee was not a side in the agreements in question and therefore could not claim that any trade secrets were his secrets.  Substantially, any documents used to support a legal claim should be available for public inspection. In addition, the opposer noted that the documents should have been supplied together with an affidavit and their dates and the parties thereof and the editor thereof should be identified.

 

Ruling

Section 23 of the Trade Related Torts Act 1999 give the courts (including the Patent Office) authority to prevent the publication of evidence considered as including trade-secrets and to allow only restricted access.

In recent Supreme Court Decision 2376/12 Rami Levi [a discount supermarket chain] vs. Moshe Dahan, July 8, 2013, Judge Amit ruled that there was a connection between the relevance of a document to a proceeding and the extent it could be kept confidential.

Essentially, where a document is relevant to a proceeding but one side claims a trade secret, the court has to weigh up the opposing rights of the parties and also to be aware of the potential damage to further entities not party to the a proceedings.

As a general rule, in civil proceedings, documents are available to all and confidentiality is the exception – See 7598/14 Theopholus Johnopholus (Theopholus III), the Greek Orthodox Patriarch of Jerusalem vs. Hymnota LTD., albeit the precedent relating to religious confidentiality and not to trade confidentiality.

Firstly, therefore, the court has to assess the relevance of the documents in question, which is a function of the arguments between the parties. In this instance, the argument relates to the restoration of a patent under Section 61 of the Patent Law 1967:

Any person may oppose a patent being restored within three months of the publication of the restoration notice on the grounds that the Commissioner [or deputy in this case] did not have grounds to order the publication of the request [i.e. to oppose the decision to reinstate].

Consequently, the discussion regarding reinstatement should focus on the three grounds for reinstatement:

  • failure to pay the fees resulted from reasonable circumstances
  • the patentee did not intend the patent to lapse
  • the patentee requested reinstatement as soon he realized that the fee was not paid.

The opposer considers that the patentee’s behaviour over the years was unprofessional, surprising and irresponsible. In other words, the patentee either wanted the patent to lapse or at least was unconcerned about his rights.

In response to these claims, the patentee described his attempts to commercialize the invention and submitted the documents about which he requested a secrecy order. The documents in question date to the period 2007 and 2008 and are thus of little relevance to the opposition proceeding.

Due to their lack of relevance to reinstatement, it seems that the right for confidentiality outweighs the right of access. They were prepared for the patentee or for exclusive licensee and were not published after they were not successful. There is no reason why these documents should enter the public record. Based on the statement of cases, the documents are not relevant and should not be published.

As to the lack of an affidavit, i.e. a signed statement testifying to that claimed, in Patent IL 118045 AstraZenca AB from 16 Jan 2005, there was a ruling to the effect that a statement should have been submitted.  However, in the Rami Levy case the Supreme Court ruled that the affidavit requesting secrecy was sufficient and there is no need for an additional affidavit accompanying the submissions. In the present case, the documentation as supplied is sufficient since the content is clearly sensitive, rendering superfluous the need for an affidavit supporting this contention.

Furthermore, the Patentee decided to submit these appendices to his statement of case and not to later submit in the evidence stage as he could have done, relying on Section 93 of the Patent Regulations 1968. Consequently, at this stage of the proceedings, the patentee does not have automatic rights to view the documents.

Thus in the meantime, the documents shall remain confidential. Should the Opposer consider these documents relevantat a later date, he is entitled to request their publication. At this time, no costs are awarded.

Opposition to reinstatement of IL 132540 “System and Method for Direct Monetary Transfer Using Magnetic Cards” to Tsabari, opposed by Going Dutch LTD., interim ruling by Jacqueline Bracha, 7 May 2015.

Comment

I am a little confused here.  The adversarial system requires that evidence brought in a legal proceeding be available to opposing parties to examine and challenge the validity thereof.

In this instance, the Opposer is using his legal right to oppose a patent being reinstated on the grounds that the patent was willfully abandoned. The Patentee has countered that there was no willful abandonment and has substantiated this claim with various evidence that allegedly shows this to be the case. In the circumstances, the evidentiary documents are considered by the patentee to be pertinent. If the patentee does not want the opposer to see the documents, he should retract them and base his case on other evidence.

That said, the 2008 documents are irrelevant as the patent only went abandoned on 24 October 2013, presumably retroactively on 24 April 2014, when the six month grace period past.

This patent was ‘abandoned’ for less than three months. The issue is when Tsabari realized that the patent had gone abandoned and when he tried to have it reinstated. Reinstatement is thus unlikely to be difficult, and one suspects that the patentee would be better served if he had chosen to use professional counsel for the reinstatement.

money plany

I had a look at the patent in question. It is a variation of the hoary old wedding present patent for directly transferring money from a credit card to the celebrants at a wedding. This is what a call a hardy perennial as approximately once a year some inventor comes in with this great idea he’s had.

Ironically the patent appears to be eminently voidable due to both lack of novelty and obviousness in light of the prior art and also on the substantive grounds that it is a software implemented business method and the fact that it is hardware implemented is insufficient to change this characteristic.


I Feel A Change Comin’ On

June 11, 2015

Former MK David Rotem Passes Away, Dr Meir Noam Resigns as Head of the IPAA but is Appointed Head of the Ethics Committee For Patent Attorneys, Meanwhile Ms Einav Zilber is Appointed Interim Head of the IPAA.

mk-david-rotem

David Rotem Z”L       

Dr Meir Noam

Dr Meir Noam

Einav Zilber

Ms Einav Zilber

arnan_gavrieli (1)

Adv. Arnan Gavrieli Z”L

David Rotem (Israel Beteinu) served three Knesset terms, and had a string of achievements and involvements. He warrants a mention in this blog since, as then Chairman of the Knesset Constitution, Law and Justice Committee in 2010, he harshly criticized Dr Meir Noam, then Israel Commissioner of Patents for failing to print the basic details of new patent filing, whilst nevertheless, collecting the publication fee from all applicants over four years, amounting to some NIS 3,000,000. What had happened was that in 2006, Dr. Noam decided to publish the data regarding new applications on the Internet rather than in the Register of Patents.  However, according to Rotem, the Law required these details to be printed, and publication on the Internet was insufficient. More details may be found here.

As a result of this, a class action was filed against the Israel Patent Office, somewhat prematurely, Director of Justice Ministry Dr Guy Rotkoff announced that the Israel Patent Office would refund the fees, Dr Meir Noam’s generally very successful tenure as Commissioner of Patents and Trademarks came to an end and Dr Guy Rotkoff became acting Commissioner, and the Israel Knesset decided to retroactively amend the Patent Law so that publish could be understood to mean publish on the internet.  Despite having reservations with retroactive amendments in general, I note that I suggested this solution as the best of the various evils.

The irony of course, is that whereas technically MK Rotem Z”L was correct and Dr Noam’s action was ultra vires, Dr Noam was correct in that the printed gazettes were simply a waste of paper and Internet publication is more convenient and more ecologically friendly. The Knesset is not very good at amending IP laws and seems to think that there are more pressing issues for it to deal with.

More recently, Dr Noam became the head of the Israel Patent Attorney Association (IPAA). Now, citing personal but not health issues, Dr Noam has resigned this position, and, in the interim before a general meeting is called, Ms Einav Zilber, in-house patent attorney at Applied Materials, has been appointed acting chairperson.

We note that Dr Noam’s father passed away a couple of months ago, and hope that he has not had further bad news.

We wish Einav and the IPAA every success. Although she is currently in-house in industry, she previously worked in private practice in Reinhold Cohn, so has experience as a service provider as well.

Dr Meir Noam is not retiring completely from the IP world, as he has been appointed head of the Ethics Committee for Patent Attorneys instead of the late Adv. (and at least formally, Patent Attorney) Arnan Gavrieli Z”L who passed away in January.

 

 

 

 


Does Size Matter? Dun & Bradstreet Publish their Silly Stats Again

June 2, 2015

1.Does Size Matter

Dun and Bradstreet has published their annual IP rankings once again. See here for the Globes article based on the Dun & Bradstreet 2015 rankings.

As readers of this blog will know, I consider the rankings infantile. D & B ranks based on the number of patent attorneys and this year, Reinhold Cohn with 43 patent attorneys has been knocked off its perch as Israel’s largest IP firm by Pearl Cohen, the new branding of PCZ”L that allegedly employs 46 patent attorneys. It seems that Dun & Bradstreet would fail their matriculation in both Maths and Geography.

The problem is that whereas Reinhold actually employs 37 patent attorneys in Israel and a further several attorneys-in-law that work in Intellectual Property, and these are all bona fide employees or partners and are all licensed, Pearl Cohen does not employ 46 patent attorneys in Israel.

Unfortunately, Pearl Cohen and D&B are somewhat misleading regarding what a patent attorney is, what an Israel licensed patent attorney is, what an Israel firm is, what an employee is and what part of the world may be considered part of Israel.

Allow me to elaborate:

1. There is a confusion between general attorneys-at-law and patent attorneys. The 55,000 odd Israel licensed attorneys-at-law may practice before the Israel patent office, but only a small fraction have any IP competence whatsoever, and a smaller fraction still understand anything about patents.

2. To practice before the USPTO one needs to be an US Patent Agent or a US Patent Attorney.

3. Pearl Cohen has a US office, a Boston office and a UK office. The employees of these offices cannot be considered as being part of an Israel firm, unless, of course, one considers Finnegan, the US’s largest IP firm as being an Israel IP firm by virtue of their Israel office and website. Finnegan has only one attorney, Gerson Panitch, based, part-time in Israel (he is actually based in Washington DC according to Finnegan’s website). If Finnegan is an Israel IP Firm, they are clearly larger than Pearl Cohen. Actually, from his profile, I am not sure that Gerson is a patent attorney licensed to practice before the USPTO, but that’s beside the point. According to the warning previously published on the Israel Patent Office website, it is also illegal for anyone other than Israeli attorneys-at-law and Israel patent attorneys to advise clients in Israel:

הובא לידיעתנו, כי אנשים שאינם עורכי דין או עורכי פטנטים עוסקים לכאורה, בשכר, בפעילות שנתייחדה לעורכי דין ולעורכי פטנטים, ובכלל זה הכנת מסמכים המוגשים לרשם הפטנטים בישראל ובחו”ל, גם אם אינם חותמים על המסמכים בשם הלקוח.כל אדם מהציבור הזקוק לשירותי ייעוץ ורישום בתחום הפטנטים, סימני המסחר והמדגמים מוזהר בזאת שלא לפנות לאותם גורמים הפועלים בצורה בלתי חוקית, שכן הסתייעות באותם גורמים עלולה לגרום להם נזק בלתי הפיך.

This is a rough translation:

Let it be known that people who are not patent attorneys or attorneys at law apparently practice, for payment, services that can only be provided by patent attorneys or attorneys at law, including preparation of documents for submitting to the Israel Patent Office and to foreign patent offices, even if they don’t sign in the name of the client. Any member of the public who needs advice or registration services relating to patents, trademarks and designs is hereby warned not to turn to such illegal practitioners, since doing so may result in irreversible damage.

This is based on Section 20(4) of the Israel Bar Law (Professional Ethics) 1988 which forbids anyone who is not a licensed attorney-at-law in Israel (or an exception, such as a Patent Attorney for IP Law) from giving legal advice. Note, I am not sure that the Israel Patent Office’s interpretation of this law is in accordance with International Obligations, and arguably (as Mr Panitch argues), a US attorney can advise re US law. Even if he is correct, I suspect that the advice will be lacking when it comes from a US attorney not licensed in Israel, as there are Israel tax and other issues that affect the decision making process. Consequently, even when the jurisdiction of interest is the US, China or Europe, an Israel firm is advised to work with foreign counsel via a local practitioner.

The one shop model of a firm with US, Israel and European offices is also, not necessarily in the client’s interest. If a local firm drafts the application and a separate US firm (and not a branch of the same firm) makes a decision regarding whether or not to litigate in the US, it is likely that the additional level of review will avoid the filing of frivolous law suits such as the Source Origin case.

4. An employee is someone who works for a company and receives a salary. Pearl Cohen has a highly dubious arrangement by which attorneys and patent attorneys that work for them are considered as not being employees and new employees are coerced into signing a statement to that effect.  Pearl Cohen’s professional employees are perhaps best considered as being free-lancers. Pearl Cohen does not pay the license fees of these professionals.

5. There are 19 patent attorneys that list their address in the Israel Patent Office database as working for Pearl Cohen in Herzliya. This is a mere 41% of the 46 patent attorneys that Pearl Cohen claims to employ. This list includes Assaf Weiler who is living in the UK according to Pearl Cohen’s website. It also includes Zeev Pearl who according to Pearl Cohen’s website is considered the managing partner working from the New York office. Pearl is licensed in Israel, but is not licensed as a patent attorney in the US.

I can’t opine about the legality of this situation since I am not licensed in the US. For those interested in exploring this further, see New York City : 1st Department, Chief Counsel, First Judicial Department, Departmental Disciplinary Committee, 61 Broadway, 2nd Floor, New York, NY10006, (212) 401-0800, Fax: (212) 287-104, Website: www.courts.state.ny.us/ip/attorneygrievance/complaints.shtml Also see the unauthorized practice of law committee in New York.  Their contact information is as follows: Kathleen Mulligan Baxter, New York State Bar Association, One Elk Street, Albany, NY12207, Tel: 518/463-3200, Fax: 518/487-5694 kbaxter@nysba.org See also ABA Formal Opinion 01-423 Forming Partnerships With Foreign Lawyers (2001). Report 201H (Licensing of Legal Consultant) Report 201J (Temporary Practice by Foreign Lawyers) as presented by the ABA Multijurisdictional Practice Commission and adopted by the ABA House of Delegates in 2003. See Also Report 107C as Amended by the ABA Ethics 20/20 Commission (ABA Model Rule on Pro Hac Vice Admission) that was adopted by the House of Delegates in 2013.

Of course, size isn’t everything. Pearl Cohen’s employment arrangement is not limited to that firm, and some competing firms have similar practices. I consider the model unethical, not least because it is both open to abuse by the ’employer’ and is frequently abused.

Dun and Bradstreet’s table has other problems. For example, Colb does not appear in the table listing the top 12 firms, and I am fairly sure that they are larger in terms of number of Israel Patent Attorneys than some of the firms that are listed.  Despite losing much of his litigation team recently, I think Dr Shlomo Cohen Law Office has enough Lawyers and patent attorneys working in IP to enter the table. There are, of course, also very large Israel law firms that have one or more patent attorney or IP lawyer working for them. Shibboleth and Shin Horowitz come to mind.

What is, of course, of more interest to clients is the competence and track record of the individual attorney who handles their files. Some of Israel’s best patent practitioners in private practice, including patent attorneys work for small firms or are sole practitioners.  This is true of both patent attorneys that draft and prosecute patents, and litigators that fight validity issues. It is also true of trademark attorneys, many of the better ones in Israel work for small firms.

The size of an IP firm can provide depth of knowledge and experience, but this is not necessarily the case. There are few economies of scale in this industry, and Parkinson’s Laws go a long way to explain why the same service from larger firms is more expensive, yet the sole practitioners and partners of smaller firms are usually better off financially than their colleagues in the larger practices.

The lists of IP firms put out by the professional magazines is also skewed towards the larger firms. The more attorneys that club together to form a single shop window, the more and larger clients they are likely to attract. The irony is that the when a successful attorney decides to grow his or her firm, the head attorney does more administration and less legal work, and is likely to take on less competent staff who are less of a threat. The more competent staff tend to break away and form their own firms. The upshot is that the average ability per attorney is generally lower in the bigger firms. A more objective statistic of a firm is the average billing per attorney, or something similar that normalizes absolute values by the number of practitioners.


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